Compound percentages

Compound percentages

L/O: To be able to use the compound percentages formula

Next few questions are recap on multipliers

Multiple Choice

What is the decimal multiplier for a 5% increase?

• 1.5

• 1.005

• 1.05

Multiple Choice

What is the decimal multiplier for a 13% decrease?

• 0.87

• 0.13

• 1.13

Multiple Choice

Another way of writing 1.05 x 1.05 x 1.05

• 3 x 1.05

• 1.05³

What happens when we have a question like this?

•  A car costing 6500 loses its value by 3.5% each year. How much will the car be worth in 3 years time? Leave your answer to the nearest penny.

Demo on Teams of the formula

Multiple Choice

A bank account accrues 3% (compound) interest for 10 years. The principal is £20,000. How much do you have at maturity?​

• £26,000

• £26,878

• £26,978

Multiple Choice

James Bond’s Aston Martin, originally worth £150,000, depreciates by 15% each year. What is its value after 5 years?​

• £66,556

• £67,556

• £68,556